Debate tries to clarify chip issues

CROSS-STRAIT INVESTMENT:Following yesterday's protest, experts attempted to provide the public with a more informed debate about the eight-inch wafer issue

By Dan Nystedt / STAFF REPORTER

Experts from industry and academia squared off over whether or not to allow local chipmakers to invest in China on live television last night in hopes they could bring about better public understanding of the politically charged issue.

As a backdrop to the debate, more than 1,000 demonstrators marched on the Executive Yuan demanding the government abandon plans to allow the investments.

The demonstrators fear that allowing chipmakers to invest in China will cause a hollowing out of the industry as chipmakers move their foundries across the Strait.

They also fear that China will gain a technological advantage over Taiwa, one of the few remaining political bargaining chips Taiwan has against China's huge market, army and growing international political clout.

The government has already said that opening investment was only a question of when, not if. It has promised to produce guidelines for the chip industry by the end of this month.

"Over the next five years, eight-inch wafer plants will remain the industry standard for chip-making," said Wu Rong-i (吳榮義), president of the Taiwan Institute for Econo-mic Research (台經院) during his opening salvo as head of the opposition.

"Semiconductor firms [in Taiwan] should wait until the eight-inch plants' time has passed, then set up in China. The era of using [state-of-the-art] 12-inch wafer fabs has not yet arrived."

Defending the proposals, Gordon Chen, (陳文咸), president of the Taiwan Semiconductor Industry Association (台灣半導體產業協會), said fears about the transfer of technology to China has been overstated.

"It's not the size that counts," he said. "It's the kind of technology that is used to etch chips onto the wafers."

Semiconductors are made on round silicon wafers the size and shape of dinner plates. In Taiwan, circuits as small as 0.13 microns can be etched onto the wafers, but Taiwanese companies will only be allowed to use technology that etches 0.25-micron circuits in their Chinese plants.

The nation's top chipmakers, Taiwan Semiconductor Manufacturing Corp (台積電) and United Microelectronics (聯電) want to move a few of the older eight-inch plants to China and build the newer 12-inch plants in Taiwan.

Chen said the nation was irrationally focused on the idea of losing the entire industry at once.

"We don't want to move every single plant to China, we're talking about two or three," he said. There are 23 eight-inch plants in Taiwan, and as many as six of them were mothballed during the industry slump last year. They have not yet reopened.

Chip companies fear losing out on China's growing market and that they will not be able to compete against the lower costs of China's own semiconductor manufacturers.

The opposition, however, said chipmakers should wait for up to five years before being allowed to invest in China -- and the government should keep the gate locked until then.

"Companies are already sneaking into China to invest. The government has not been able to manage this, therefore it should be completely off limits," said Lo Cheng-fang (羅正方), executive director of the Taiwan Thinktank (台灣智庫).

He also pointed out that a TSMC executive had stolen secrets to give to a Chinese company, a further sign, he said, of China's resolve to steal Taiwan's chip industry.

One viewer with a general interest in the issue said he came away from the program with a better understanding of both sides' views, but that he had not changed his mind.